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How neoliberalism manufactured consent to secure its unlimited power

Part
6 - How the big capital neoliberalized politics and put the
foundations of the bipartisan dictatorship in the United States of
70s

In order
to realize this goal, businesses needed a political class instrument
and a popular base. They therefore actively sought to capture the
Republican Party as their own instrument. The formation of powerful
political action committees to procure, as the old adage had it, ‘the
best government that money could buy’ was an important step.

The
supposedly ‘progressive’ campaign finance laws of 1971 in effect
legalized the financial corruption of politics. A crucial set of
Supreme Court decisions began in 1976 when it was first established
that the right of a corporation to make unlimited money contributions
to political parties and political action committees was protected
under the First Amendment guaranteeing the rights of individuals (in
this instance corpor- ations) to freedom of speech.

Political
action committees (PACs) could thereafter ensure the financial
domination of both political parties by corporate, moneyed, and
professional association interests.

Corporate
PACs, which numbered eightynine in 1974, had burgeoned to 1,467 by
1982. While these were willing to fund powerful incumbents of
both parties provided their interests were served, they also
systematically leaned towards supporting right-wing challengers.

In the
late 1970s Reagan (then Governor of California) and William Simon
(whom we have already encountered) went out of their way to urge the
PACs to direct their efforts towards funding Republican candidates
with right-wing sympathies. The $5,000 limit on each PAC’s
contribution to any one individual forced PACs from different
corporations and industries to work together, and that meant building
alliances based on class rather than particular interests.

The
willingness of the Republican Party to become the representative of
‘its dominant class constituency’ during this period
contrasted, Edsall notes, with the ‘ideologically ambivalent’
attitude of the Democrats which grew out of ‘the fact that its
ties to various groups in society are diffuse, and none of these
groups –– women, blacks, labour, the elderly, hispanics, urban
political organizations –– stands clearly larger than the
others’.

The
dependency of Democrats, furthermore, on ‘big money’
contributions rendered many of them highly vulnerable to direct
influence from business interests. While the Democratic Party had a
popular base, it could not easily pursue an anti-capitalist or
anti-corporate political line without totally severing its
connections with powerful financial interests.

The
Republican Party needed, however, a solid electoral base if it was to
colonize power effectively. It was around this time that Republicans
sought an alliance with the Christian right. The latter had not been
politically active in the past, but the foundation of Jerry Falwell’s
‘moral majority’ as a political movement in 1978 changed all of
that.

The
Republican Party now had its Christian base. It also appealed to the
cultural nationalism of the white working classes and their besieged
sense of moral righteousness (besieged because this class lived under
conditions of chronic economic insecurity and felt excluded from many
of the benefits that were being distributed through affirmative
action and other state programmes).

This
political base could be mobilized through the positives of religion
and cultural nationalism and negatively through coded, if not
blatant, racism, homophobia, and anti-feminism. The problem was not
capitalism and the neoliberalization of culture, but the ‘liberals’
who had used excessive state power to provide for special groups
(blacks, women, environmentalists, etc.).

A
well-funded movement of neoconservative intellectuals (gathered
around Irving Kristol and Norman Podhoretz and the journal
Commentary), espousing morality and traditional values, gave credence
to these theses. Supporting the
neoliberal turn economically but not culturally, they excoriated the
interventionist excesses of a so-called ‘liberal elite’ ––
thus greatly muddying what the term ‘liberal’ might mean.The effect was to divert attention from
capitalism and corporate power as in any way having anything to do
with either the economic or the cultural problems that unbridled
commercialism and individualism were creating.

From
then on the unholy alliance between big business and conservative
Christians backed by the neoconservatives steadily consolidated,
eventually eradicating all liberal elements (significant and
influential in the 1960s) from the Republican Party, particularly
after 1990, and turning it into the relatively homogeneous right-wing
electoral force of present times.

Not for
the first, nor, it is to be feared, for the last time in history has
a social group been persuaded to vote against its material, economic,
and class interests for cultural, nationalist, and religious reasons.

In
some cases, however, it is probably more appropriate to replace the
word ‘persuaded’ with ‘elected’, since there is abundant
evidence that the evangelical Christians (no more than 20 per cent of
the population) who make up the core of the ‘moral majority’
eagerly embraced the alliance with big business and the Republican
Party as a means to further promote their evangelical and moral
agenda. This was certainly the case with the shadowy and secretive
organization of Christian conservatives that constituted the Council
for National Policy, founded in 1981, ‘to
strategize how to turn the country to the right’.

The
Democratic Party, on the other hand, was fundamentally riven by the
need to placate, if not succour, corporate and financial interests
while at the same time making some gestures towards improving the
material conditions of life for its popular base. During the Clinton
presidency it ended up choosing the former over the latter and
therefore fell directly into the neoliberal fold of policy
prescription and implementation (as, for example, in the reform of
welfare).

But, as
in the case of Felix Rohatyn, it is doubtful if this was Clinton’s
agenda from the very beginning. Faced with the need to overcome a
huge deficit and spark economic growth, his only feasible economic
path was deficit reduction to achieve low interest rates.

That
meant either substantially higher taxation (which amounted to
electoral suicide) or cutbacks in the budget. Going for the latter
meant, as Yergin and Stanislaw put it, ‘betraying their
traditional constituencies in order to pamper the rich’
or, as Joseph Stiglitz, once chair of Clinton’s Council of Economic
Advisors, later confessed, ‘we did manage to tighten the
belts of the poor as we loosened those on the rich’.
Social policy was in effect put in the care of the Wall Street
bondholders (much as had happened in New York City earlier), with
predictable consequences.

The
political structure that emerged was quite simple. The Republican
Party could mobilize massive financial resources and mobilize its
popular base to vote against its material interests on
cultural/religious grounds while the Democratic Party could not
afford to attend to the material needs (for example for a national
healthcare system) of its traditional popular base for fear of
offending capitalist class interests. Given the asymmetry, the
political hegemony of the Republican Party became more sure.

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